Baku, Azerbaijan, Jan.12
By Dalga Khatinoglu - Trend:
Oil markets are gloomy and without any short-term perspective, Parviz Mina, who served as a member of OPEC Long-Term Strategy Committee, told Trend.
Mina said Jan.12 that the only chance for supporting oil prices is to decline the OPEC production, but considering the acceleration of Iran-Saudi Arabia issue, it seems impossible that Riyadh decreases its output.
OPEC oil basket price plunged to $27.07 on Jan.11. According to OPEC's official website, this figure is $11 less than Dec.4, when the member countries failed to agree on determining a new production ceiling.
OPEC oil basket price was about $108 in first half of 2014, but has been decreasing due to glut in the markets. The current figure is the lowest price since early 2014.
Mina said that the current oil price would remain at the current level, unless the current mild weather becomes colder during winter to boost energy demands or China's economy growth revives to push the oil prices $3-5 up, however no further price increase is expected.
"Saudi Arabia has been traditionally the solo controller of oil prices in the last 30 years, cutting its production volume whenever the prices decrease. However, it doesn't want to lose its share in the markets anymore," Mina said.
He believes that in mid-term, the glut in the oil markets will remain.
According to a monthly OPEC report, released Dec.10, the total OPEC crude oil production in November rose by 0.23 million barrels per day (mb/d) to 31. 695 mb/d - about 1.7 mb/d more than the ceiling level.
That is while, according to the report, the demand for the cartel's oil in 2015 is 2.1 mb/d less than the current level.
Demand for OPEC's crude in 2015 is estimated to stand at 29.4 mb/d, an increase of 0.4 mb/d over last year, according to the report.
The report said that in 2016, the demand for OPEC crude is forecasted at 30.8 mb/d, an increase of 1.5 mb/d over the current year.